The companies failed to reach agreement over the terms of a
deal, said the people, who declined to be identified because the
negotiations are private. Birmingham, Alabama-based Regions has
also been in talks with Raymond James Financial Inc., people
familiar with the matter said earlier this month.

Regions is seeking a buyer for Memphis, Tennessee-based
Morgan Keegan to improve capital and eventually repay a $3.5
billion U.S. bailout, the largest still outstanding for any
institution under the Treasury’s bank-rescue program.

Morgan Keegan has 1,200 financial advisers to Raymond
James’s 5,100. Stifel has about 2,000. A period of exclusive
negotiations with Stifel, based in St. Louis, had expired,
allowing Raymond James to revive discussions, two people said
earlier this month.

Regions previously had been in talks with two groups of
buyout firms, one comprising Carlyle Group and Blackstone Group
LP, and the other made up of Thomas H. Lee Partners LP and
Aquiline Capital Partners LLC.